Prabhu Dayal, Indian consul general in New York, has been slapped with a forced-labour suit by a former housekeeper.
She accused him of treating her like a slave and making sexual advances. The diplomat has rejected the charges as "mischievous" and "complete nonsense".
Dayal is believed to have promised Santosh Bhardwaj $10 (Rs 450) an hour, plus overtime, to cook and clean for him and his wife after he was appointed in 2008, according to New York Post.
Once she arrived in the US, Bhardwaj, 45, alleged that Dayal confiscated her passport and paid her only $300 a month.
She had to sleep in a storage closet and work more than 15 hours a day, seven days a week, the Post said.
"I filed the complaint because I want to be paid for all the labour I provided and for all the injustice I suffered — and I want my passport returned," Bhardwaj said.
The Post citing her Manhattan federal court filing — which seeks unspecified damages and the return of her passport — said she escaped last year by slipping out of the Indian consulate building while Dayal was out at a meeting and his wife was in her room with the door closed.
Dayal has rubbished the charges. "These are mischievous and malicious lies."
"We are trying to ascertain the details," said an official accompanying external affairs minister SM Krishna on his Myanmar visit.
The Post cited a spokesperson for the Legal Aid Society, which is representing Bhardwaj, as saying Dayal didn't enjoy diplomatic immunity because consular officers were only covered for their "official acts".
"This fraudster of a woman, seeing dollar signs, has hit on a get-rich-quick scheme after a year-and-a-half of illegally staying and working in New York," said Ravi Batra, Dayal's lawyer.